Gen Digital (GEN)
Information Technology · $17.7B market cap · SEC CIK 0000849399
ahead of 93% of the S&P 500 · #7 of 73 in Information Technology
Next reports on Feb 3, 2027, with analysts expecting $0.75 in earnings per share.
52-week range $17.78 to $31.65. 5% below its 52-week high and 69% above its low.
The case for GEN
- Revenue up 20.2% on the year.
- Cheap for its growth: 16.8× earnings, where 15% a year of growth plus a 2.4% dividend would justify about 34×.
- Earns 42% back on shareholder equity.
- Generated $1.5B of free cash flow in FY2026, 30% of revenue.
- 21% of revenue drops through to net profit.
- Free cash flow of 8.6% of its market value a year: a lot of cash for the price.
The case against
- Long-term debt of $8.0B would take 5 years of operating cash flow to repay.
- Current liabilities exceed current assets (ratio 0.47).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 90 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 75 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 69 |
| Momentumhow the price has behaved lately | 70 |
| Stabilityhow violently it moves, what it owes and what it pays you | 34 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +20.2% |
|---|---|
| Over 5 years | +14.4% a year |
| FY2026 revenue | $5.0B (+27%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2026 free cash flow | $1.5B |
|---|---|
| Of revenue | 30% |
| Of profit | 157% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 78% |
|---|---|
| Operating margin | 41% |
| Net margin, FY25 → FY26 → now | 16.3% → 19.5% → 20.7% |
Debt vs. cash
Is the balance sheet healthy? Stretched
| Cash | $411M |
|---|---|
| Long-term debt | $8.0B |
| Net debt | $7.6B |
| Years to repay | 5.2 yrs |
Valuation
Is the stock price reasonable? Yes, it looks cheap
| P/E | 16.8× |
|---|---|
| Fair P/E for its growth | 34× |
| P/FCF | 11.6× |
| Forward P/E | 9.2× |
| EV / EBITDA | 10.9× |
At 16.8× earnings it trades well below the 34× that 15% a year of growth plus a 2.4% dividend would justify. At 11.6× free cash flow it trades well below that same mark.
The financials, five years deep
Pulled from Gen Digital's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $5.0B | $3.9B | $3.8B | $3.3B | $2.8B |
| Change on the year | +27% | +4% | +15% | +19% | — |
| Free cash flow | |||||
| Free cash flow | $1.5B | $1.2B | $2.0B | $751M | $968M |
| Of revenue | 30% | 31% | 54% | 23% | 35% |
| Profit margins | |||||
| Gross margin | 78.5% | 80.3% | 80.8% | 82.2% | 85.4% |
| Operating margin | 42.4% | 40.9% | 29.2% | 36.4% | 35.9% |
| Net margin | 19.5% | 16.3% | 16.0% | 40.2% | 29.9% |
| Debt vs. cash | |||||
| Cash | $411M | $1.0B | $846M | $750M | $1.9B |
| Long-term debt | $8.0B | $8.0B | $8.4B | $9.5B | $2.7B |
| Net cash (debt) | −$7.6B | −$7.0B | −$7.6B | −$8.8B | −$849M |
What Gen Digital says it does
Purpose and Mission Purpose: Powering Digital Freedom. Mission: We create innovative and easy-to-use technology solutions that help people grow, manage and secure their digital and financial lives. Our Values Protecting people is what inspires us, and our people are at the core of what we do. We seek to attract talent that embraces the following values: • Customer Driven. Community Minded. We are customer obsessed and drive positive impact. • Think Big. Be Bold. We embrace change and innovate fearlessly. • Be Scrappy. Make it Happen. Big or small, we get things done irrespective of title or role. • Play to Win. Together. We win for our customers, with passion and integrity. Company Overview Gen Digital Inc. is a global leader in consumer Cyber Safety and Trust-Based Solutions, empowering people around the world to live safer digital lives while building confidence and control over their financial futures. Through its trusted brands…
Risk factors GEN lists in its 10-K
- We operate in a highly competitive and dynamic environment, and if we are unable to compete effectively, we could experience a loss in market share and a reduction in revenue
- Issues in the development and deployment of AI, including generative AI and emerging AI-enabled cyber threats, could expose us to regulatory, privacy, IP, cybersecurity, operational and reputational risks
- Our acquisitions and divestitures create special risks and challenges that could adversely affect our financial results
- Our revenue and operating results depend significantly on our ability to retain our existing customers and increase their adoption of our offerings, convert existing non-paying customers to paying customers, and add new customers
- We may need to change our pricing models to compete successfully
- Changes in industry structure and market conditions have and may continue to lead to charges related to discontinuance of certain products or businesses and asset impairments
- Our international operations involve risks that could increase our expenses, adversely affect our operating results and require increased time and attention from management
- Our future success depends on our ability to attract and retain personnel in a competitive marketplace
- If we fail to offer high-quality customer support, our customer satisfaction may suffer and have a negative impact on our business and reputation
- Our solutions, systems, websites and the data on these sources have been and may continue to be subject to cybersecurity events that could materially harm our reputation and future sales
- We collect, use, disclose, store or otherwise process personal information and other sensitive data, which is subject to stringent and changing state and federal laws and regulations
- Our inability to successfully recover from a disaster or other business continuity event could impair our ability to deliver our products and services and harm our business
- We are dependent upon Broadcom for certain engineering and threat response services, which are critical to many of our products and business
- Our solutions are complex and operate in a wide variety of environments, systems and configurations, which could result in failures of our solutions to function as designed
- Negative publicity regarding our brand, solutions and business could harm our competitive position
- Our reputation and/or business could be negatively impacted by sustainability and governance matters and/or our reporting of such matters
- We are affected by seasonality, which has in the past and may in the future impact our revenue and results of operations
- Our solutions are highly regulated, which could impede our ability to market and provide our solutions, increase regulatory scrutiny or adversely affect our business, financial position, results of operations and cash flows
- “-- If we fail to operate in compliance with state or local licensing requirements, it could adversely affect our business, financial condition, results of operations and cash flows.”
- The legal and regulatory regimes governing certain of our products and services are uncertain and evolving
- --Issues in the development and deployment of AI, including generative AI, could expose us to regulatory, privacy, IP, cybersecurity, operational and reputational risks
- If we fail to operate in compliance with state or local licensing requirements, it could adversely affect our business, financial condition, results of operations and cash flows
- If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed
- Third parties have claimed and additional third parties in the future may claim that we infringe their proprietary rights
- Some of our products contain “open source” software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business
- Our substantial indebtedness and related debt obligations could limit our financial and operating flexibility and increase our vulnerability to adverse business and economic conditions
- Our Amended Credit Agreement imposes operating and financial restrictions on us
- The failure of financial institutions or transactional counterparties could adversely affect our current and projected business operations and our financial condition and result of operations
- Adverse macroeconomic conditions have adversely affected and may continue to adversely affect the consumer finance industry and our MoneyLion business
- Fluctuations in our quarterly financial results have affected the trading price of our stock in the past and could affect the trading price of our stock in the future
- We may be required to issue shares under our contingent value rights agreement
- Our corporate and legal entity structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our results of operations